INTERNATIONAL BUSINESS BBB 4M

1. INTERNATIONAL BUSINESSBBB 4M CHAPTER 2: IMPORTANCE OF INTERNATIONAL BUSINESS

2. KEY CONCEPTS IN SECTION 2.1 • Importing and Exporting • Trade Missions • Trade Shows • Foreign Investments

3. 2.1 ASPECTS OF INTERNATIONAL BUSINESS • International business … • Refers to all the activities needed to get a product to consumers • involves trade, importing, exporting, licensing, use of foreign assets and foreign investment

4. International Trade • The main premise of business is trade. • International trade is the basis of international business. • It involves companies in one country fulfilling the needs and wants of another by selling products (exporting) to groups. • It also involves companies bringing in products (importing) to satisfy the needs and wants or their own consumers.

5. Importing • Canada may need products that are only available, or can be obtained more conveniently and economically, from foreign sources. Higher quality products may also be obtained. • There must be a known demand for a product before it is imported • Importer must contact foreign suppliers. • Next the purchase needs to be finalized—who pays for shipping, delivery date, method of payment. Order must be checked when it arrives. • Sufficient research must be done to know if the product, its quality and cost will sell in Canada.

6. Exporting • Exporters need to find businesses and/or customers who need the product. • The exporter needs to establish a presence in that country, have enough production capacity, cope with the higher international costs and understand how business is done in that country. • Exports are shipped according to weight and volume. Speed of shipment affects the cost. • Ontario accounts for almost ½ of Canada’s export revenue. 93% of its exports went to the U.S.

7. Canada's Major Trading Partners - 2010Canada trades with the world but its main trading partner is the U.S., accounting for roughly two-thirds of trade and the majority of capital moving in and out of Canada. Exports – 2010 by Country Imports – 2010 by Country

8. Starting an Import or Export Business • Being ready means having i) management commitment, ii) competitive advantage, iii) cash flow, iv) capacity to produce. • Marketing and servicing experience will be useful in creating a viable business plan for use internationally. Essential is the investment of time, money and proper market selection.

9. Trade Missions • Selected Canadian firms visit a targeted foreign country. Incoming trade missions welcome foreigners to Canada. • Missions increase the visitor’s knowledge of the country as a potential source of supply and a place to arrange a joint venture. • Mission organizers can help link potential exporters with officials in target countries and handle the logistics of the mission.

11. Team Canada promotes Canada as a good place to do business. • It contains the Prime Minister, provincial premiers and representatives from government and business. • It is also important to maintain important contacts with foreign governments, banks and businesses.

12. Trade Shows • Shows allow a potential purchaser to communicate with suppliers. Fairs provide exporters with potential sales opportunities, promotion of their products, and to develop valuable contacts. • Trade shows often focus on one industry. • Companies attending foreign trade shows must declare product samples to customs. Calling customs ahead of time can help in terms of any payments and documentation required.

14. Exporting Goods and Services • Most international businesses deal with importing and exporting goods. • Canadian exports include lumber, textiles, clothing, fur, aircraft, trains, minerals, and chemicals. Canadian imports include machinery, vehicles, and electronic components. • Canada’s export services are growing. The purchaser pays for the knowledge, creativity, or manual work of the provider. • Business functions can now be performed without leaving Canada, i.e. call centres, on-line courses.

15. Many businesses sell both goods and services. Montreal-based Cirque du Soleil provides circus arts (services) to 3 continents. It is branching into other entertainment activities. • Cirque du Soleil also sells DVDs, videos and souvenirs (goods) that are made in China and Taiwan and imported into North America

18. Foreign Investments • Public-sector investments involve putting money in government-owned assets. • Private-sectorinvestments are usually held in shares on the stock market. • Foreign direct investments (FDIs) occur when a company established a subsidiary operation or a joint venture in another country.

19. A company can invest into foreign land or property, construction or finance of many projects. • One example is Walt Disney’s building of Disneyland Paris. Controlling interest of EuroDisney is held by the parent American Walt Disney company.

22. BOEING DREAMLINER

23. BOEING DREAMLINER • Report: Boeing seeks Middle East investors • Dayton Business Journal by Daniel McCoy , DBJ Contributor • Date: Thursday, September 29, 2011, 4:09pm EDT • The Boeing Co. this week put out calls to potential investors in the Middle East after concerns about the stability of European creditors. • According to a report from the Chicago Tribune, Boeing (NYSE: BA) is seeking the financing to offset any pullback that may occur from cash-strapped European investors. • And with new aircraft like the 787 Dreamliner and 747-8 hitting the market, as well the 737 Max in the works, Boeing will need to make sure its customers can finance future orders. • The health of Boeing and the ability of its customers to follow through on orders could have a big impact on the economy in Dayton and the state of Ohio. • In the Dayton area, Boeing has 23 different suppliers based on its 2010 annual report. The aerospace giant has roughly 500 suppliers in Ohio and spent more than $4.7 billion in purchases from Ohio companies last year, supporting an estimated 150,000 jobs in the state. Boeing, which has an office in Dayton, has 600 employees in Ohio and more than 6,600 retirees. • While Boeing is looking to Middle East for investment, at least one of the region’s major players in the aviation industry is looking to Boeing for innovation.

25. Portfolio Investment • An investor buys a share of a foreign compnay but has no controlling interest and little say in how the company is run • The investor (a company or a person) simply wants to earn a share of the foreign company’s profit • Portfolio investments are usually less risky thanl direct investments

26. “Vancouver Industry looks to growing Chinese market” • The representatives of what industry are meeting in Vancouver to discuss a new initiative between British Columbia and China? • What are the 2 main reasons for the interest in the Chinese market by this industry? • What are some of the other reasons for reaching out to this market? • What is the Chinese Film and Motion picture industry specifically interested in..in Vancouver? • Why does the Vancouver group feel so confident about this potential partnership with the Chinese industry?